Supply Chain Management (SCM) is a common problem for any organization involved in the design, manufacture and distribution of goods. SCM is particularly important in retail organizations where the successful management of product inventory and the promotion of customer satisfaction are essential for efficient operation, customer loyalty, and optimal profit margins. Common SCM activities for product manufacturers as well as retailers include inventory control, supplier network development, purchasing and marketing.
One of the goals of marketing is to continually enhance customer satisfaction. To enhance customer satisfaction, many retail operations support various manufacturer sponsored promotional offers to customers. Additionally, a retailer may offer its own promotional offers. Many such promotional offers are presented to customers via discount coupons that are redeemable at the point of sale. Coupon promotional offers are well known and normally offer a discount for purchasing a product.
A similar type of coupon based promotional offer relates to cross-marketing coupons. A manufacturer may issue a cross-marketing coupon in which the purchase of a first product triggers a discount coupon offer for purchasing a second product. Such second product may be a different product (different from the first product) produced by the same manufacturer or for a different product produced by a second manufacturer. A cross-marketing offer is typically for products that are commonly used at the same time (e.g., baby wipes and diapers). Cross-marketing coupons may also be used to promote a customer's “trial use” of an entirely new product or a new and improved version of an existing product.
Prior art cross-marketing coupon systems typically print cross-marketing coupons directly on a product package or enclosed the coupon within the product package. Such prior art systems exhibit several inherent limitations that adversely affect the effectiveness of cross-marketing promotional offers.
First, cross-marketing coupons are generally special promotional events valid only for a predetermined length of time and may be intended for distribution to a specific retailer or retailers. Consequently, a manufacturer must interrupt a production line to print retailer specific cross-marketing coupons on the product package or product documentation and then segregate that product from the rest of the product inventory. The additional coupon-printing step and segregation (e.g., special handling and distribution) of the promotional product from the rest of the product inventory adds additional cost to the product, is time consuming and requires substantial lead time for the manufacturer to offer such a promotional event.
Second, printing cross-marketing coupons directly on a product package or enclosing the coupon within the product package increases customer inconvenience. Such prior art cross-marketing coupon systems would typically require a customer to purchase (perhaps even consume) a “cross-marketing coupon triggering product” before such customer can remove and use the coupon. Such a system would typically require a customer to use a cross-marketing coupon at a later date. Therefore, a customer must both clip coupons and keep track of the clipped coupons until a later time when such coupons are used. Such customer inconveniences reduce the effectiveness of cross-marketing coupon offers as many customers will likely choose not use the coupon at all.
Third, prior art coupon systems result in longer average check-out times which can contribute to longer check-out lines. Many prior art coupon redemption processes implemented at a point-of-sale (e.g., scanning a product bar code at the check-out counter) are unnecessarily time consuming in today's electronic world. Additionally, customers will almost always resent long check-out lines and may base their future patronage decisions at least in part on memories of long check-out lines. Consequently, promotional offers that result in longer check-out lines have the potential to actually discourage customer patronage.
Fourth, prior art coupon systems (i.e., paper-based coupons) require a retailer to collect the coupons and then send them to a clearinghouse, which is typically an independent company used by a retailer to sort, count, and submit coupons for payment to manufacturers or their agents on behalf of the retailer. Further, the manufacturer must pay the clearinghouse and the retailer for their role in handling and processing the redeemed coupons. Clearly all costs relating to a coupon program must be considered by the coupon offering party when determining the amount of a coupon offer. Restated, the coupon processing overhead costs will be determined and such costs will reduce the amount of “savings” offered to a customer thereby indirectly passing such processing costs to the customer.
Fifth, the previously described prior art systems have limited ability to influence a shopper at the point of a purchasing decision, or simply, the point of decision. The point of decision is generally defined as the moment a customer makes a purchasing decision. The point of decision would typically occur, for example, while a shopper is walking through a retailer store examining products. Retailers and manufacturers have long known the importance of the influencing shoppers at the point of decision; however, their efforts to influence a shopper at the point of decision have largely been limited to markings on product package, such as witty slogans or eye catching color schemes and gimmicks such as “blue light special” programs. The above described prior art system of printing cross-marketing promotional offerings on a product's packaging or coupons included inside a product's packaging have limited ability to influence a shopper at the point of decision.
An alternative to traditional coupons printed on, or enclosed in, a product are electronic coupons. One such system is described in U.S. Pat. No. 5,727,153, issued to Ken R. Powell, and such reference is hereby incorporated for all purposes. Powell U.S. Pat. No. 5,727,153 describes a system for creating, dispensing, and redeeming electronic discount coupons in a store. The system includes a “smart card,” product stations adjacent to selected products in the store and a check-out station. To create an electronic coupon, the customer inserts the card into the product station adjacent to the product the customer wishes to purchase, and the product station then writes an electronic coupon onto the card. The customer continues to shop throughout the store, collecting electronic coupons for products of interest. Upon completing his or her shopping, the customer redeems the electronic coupons at the check-out area by inserting the card into the check-out station. If the product code data (e.g., the Universal Product Code, or UPC) on the product matches data stored on the card, the customer receives the discount. Periodically, the electronic coupon data is transferred to a remote clearing house.
One limitation of the Powell U.S. Pat. No. 5,727,153 electronic coupon system, however, relates to the “smart card” feature. Using the Powell '153 system, a customer must have in his or her possession a smart card and must repeatedly “scan” the smart card in order to collect and qualify for discount offers. The customer may misplace such card while on a shopping trip. In addition, a customer may not take the time to repeatedly scan the card or may simply forget to scan the card. Further, the Powell '153 electronic coupon system does not provide for cross-marketing offers.
Therefore a need exists for a cross-marketing promotional process that does any one of the following: (1) provides more flexibility in creating promotional offers by substantially reducing or eliminating the lead time required for a manufacturer to offer a promotional event; (2) provides for “after shipping” cross-marketing promotional offer (i.e. a promotional offer that is conceived and offered after the product is shipped); (3) provides for a cross-marketing promotional process that is more cost-efficient; (4) that minimizes or eliminates customer inconveniences such as longer check-out times, coupon clipping and the necessity to return to the store to use cross-marketing coupons; and (5) provides an improved method for influencing a shopper at the point of a purchasing decision.